If you live outside the USA then you were used to seeing a Warner Bros. theatre attached to your local mall at one stage. Before the explosion of the multiplex many town centres even had a Cannon theatre for quite a few years, before Golan Globus had its issues.
So it may seem strange to think that in the USA it is actually illegal for a movie studio to own its own theatre chain. This is due to something called the Paramount Consent Decree.
Due to some pretty shady practices by studios back in the 30’s and 40’s, such as block booking, price fixing and cross studio deals on release dates to remove competition there was an antitrust issue.
This led to a Supreme Court decision in 1948 to regulate how movie studios distribute films. Part of this was banning Warners, Disney and their peers from owning their own theatres chains. It also made these sharp practices illegal.
The Wall Street Journal today indicates that the U.S. Justice Department is making a move to completely overturn these restrictions on theatre ownership.
Justice Department’s antitrust division has been carrying out a review and conclude that these rules have:
“…outlived their usefulness…”
In a speech to the American Bar Association the head of the associated division clarified:
“We have determined that the decrees, as they are, no longer serve the public interest, because the horizontal conspiracy – the original violation animating the decrees – has been stopped. The Division finds the consent decrees no longer meet consumer interests.”
These rules are considered, in this new landscape, to restrict ‘consumer-enhancing innovation’ therefore they are likely to be scrapped.
The Justice Department will have to ask a court to terminate the decrees within the next few days to weeks. Restrictions on block booking and circuit dealing will remain in place while the Justice Department considers the best way to regulate these practices within the new landscape.
The National Association of Theatre Owners has urged the department to retain the ban on block-booking saying studios could force cinemas to accept multiple films from their slate that they wouldn’t choose in order to access just the few blockbusters a year. They argue this would push out smaller and independent movies.
This could mean we see Amazon and Netflix theatres in 2020 in order to get around those pesky, snooty award show restrictions. However it could also mean that some big players move into a market and force out independent chains.
What do you think? Ready to experience Disney theatres?